At the end of November (see here) we reported on the speech given by George Lusty of the CMA at the Gambling Commission’s Raising Standards conference. At that conference, Mr. Lusty stated that the CMA had requested undertakings from the companies against which it had commenced enforcement action and, at the end of his speech, a representative of the Gambling Commission made it clear that online operators were expected to take “immediate steps” to ensure that their terms and conditions were compliant with consumer law. This was the case even though no undertakings had then been published by the CMA.
The CMA announced today (see here) that it has agreed undertakings with three operators – Ladbrokes, William Hill and PT Entertainment (the undertakings have been published here). The Gambling Commission, meanwhile, has reaffirmed its position by stating that:
“We expect all Gambling Commission licensed businesses to immediately review the promotions and sign up deals they offer customers and take whatever steps they need to take, to the same timescales agreed by the three operators, to ensure they comply. Operators should be very aware that we will continue to work closely with the CMA to ensure customers are getting a fair deal across the gambling industry.”
The undertakings require the majority of practices to be amended by 28 February 2018 (with a later day of 31 July for the implementation of prompts for consumers when they are playing with restricted funds as further set out below).
As a footnote to the CMA’s press release makes clear, the provision of undertakings is not an admission by the three operators of a breach of the law and nor does the CMA’s view amount to a binding ruling – only the courts can determine that a particular term or practice infringes consumer law.
This raises an interesting question in that it has always been reported that five online operators were the subject of enforcement action and, if this is correct, it would follow that the other two companies have not agreed undertakings. More interestingly, if one of these other companies refused to agree undertakings and the CMA took the issue to court, what would the position be should the court conclude that the relevant terms or practices were not contrary to consumer law? If this were to be the case, other operators who had complied with the Gambling Commission’s requirement and had modified their terms and practices to reflect the undertakings would presumably be able to amend their terms and practices to reflect the court’s ruling but the three operators would still technically be bound by the undertakings they have given to the CMA.
In the same vein, the LCCP in essence requires operators to comply with consumer law, but can the Commission confidently take action against other operators for failing to conform their terms and practices with those set out in the undertakings when it is not unequivocally established that the terms and practices outlawed by the undertakings do in fact infringe consumer law?
In summary, the effect of the undertakings is to outlaw:
- any restriction on a player’s ability to withdraw his/her deposited funds in full, other than by applying a charge limited to “a reasonable estimate of the costs directly incurred” by the operator in relation to the processing of the withdrawal. Where a customer requests to withdraw less than their entire balance, the operators may impose a reasonable limit on the size of the withdrawal or the number of separate withdrawals that the customer may make;
- the enrolment of a consumer in any promotion without first obtaining their “express and informed consent” to accept the specific promotion terms; and
- the enforcement of any “account restrictions” (any stake restriction, stake factoring or ability to receive bonuses) against a customer who has, prior to such account restrictions being notified to him, made one or more qualifying bets in respect of a free bet promotion. This applies where such enforcement would affect the consumer’s ability to complete the qualifying bets required by the promotion or to receive any of the free bets. The operators must inform customers that the account restriction is without prejudice to such rights and of the steps they need to take to receive the full benefit of the applicable promotion.
Many of the undertakings relate to wagering requirements and “promotional play restrictions”, the latter of which are the restrictions that apply to the wagers a consumer can make in addition to any restrictions that would apply in non-promotional play (such as limiting the size of bets, games that can be played or patterns of play). The undertakings commit the relevant operators to ensure that:
- at all times a player is aware when they are playing with any “restricted funds” (being any funds which are subject to wagering requirements or promotional play restrictions), and if they are, about the nature of and consequences of non-compliance with the same;
- wagering requirements and promotional play restrictions do not apply to any play by a consumer with their deposited balance except where “ingame mechanisms automatically prevent a consumer from placing a wager that contravenes” the promotional play restrictions;
- all terms and conditions that set out promotional play restrictions clearly specify all prohibited types or patterns of play and do not reserve discretion for the operator to determine whether play is in breach of the relevant restrictions. They must also ensure that terms setting out prohibitions and sanctions on account fraud, collusion, use of multiple accounts, manipulation of software, exploitation of loopholes or other technical forms of abuse or other behaviour which amounts to deliberate cheating, are contained in separate terms to those relating to promotional play restrictions; and
- where the decision has been taken that a consumer is to lose their winnings or is to be refused a requested withdrawal from their account on the grounds of a breach of promotional play restrictions, that the consumer is provided with a full explanation of the breach.
Finally, the operators must ensure that:
- the balance of the player’s deposited amounts and his/her bonus balance are always displayed separately; and
- all terms and conditions for promotions are accessible on all relevant landing pages and within a single click of all adverts, and that all significant conditions are in the headline offer on all relevant landing webpages.
The above will no doubt require not only amendments to be made to the operators’ terms and conditions, but also website development to incorporate new functionality, and a change in strategy for player acquisition.